Westerfeld isn't confused. He's quite certain of how to read that story. You may think the reading's wrong, but that's not the same thing as being confused.

I don't think the zombies in "Some Zombie Contingency Plans" *are* a metaphor. Discussing zombies is a way for Soap and his friend to express or relieve some of their general anxiety (which Westerfeld obliquely alludes to), but that doesn't mean the zombies *stand for* anxiety. The zombies in "The Hortlak," those are a metaphor. And also literal.

Literary fiction is certainly a community, just like science fiction. But since I don't think science fiction is a genre, and just use the term for ease of argument, I'm not about to call literary fiction a genre. :)

So long as I can call literary fiction a genre for ease of argument, sure. :)